UNION BUDGET 2019-20: KEY HIGHLIGHTS

Ms Nirmala Sitharaman, Finance Minister, Government of India, highlighted the vision for the decade through her introductory speech. She placed high emphasis on the physical and social infrastructure; digital India; Make in India with a specific focus on the micro, small and medium enterprises (MSMEs); environmental protection; space programs; public private partnership; etc. to achieve the mark of five trillion dollar economy by 2024. Some of the featured highlights from the Budget 2019 are as follows:

  • Total budget outlay is INR 27.86 lakh crore
  • Investments and infrastructure to drive the vision of achieving USD 5 trillion economy. India is now sixth largest economy in the world. In the purchase power parity terms, India is already among the three largest economies
  • Ease of living through transforming rural and urban lives
  • Empowering women and bringing out women led initiatives
  • India’s soft power to be further reinforced through Yoga, Gandhipedia and showcasing our culture through world class tourism sites
  • Harnessing India’s space abilities

Massive push on Investments and Infrastructure

  • Need to invest heavily in Infrastructure and jobs creation
  • India has added USD 1 trillion to the economy in just five years bringing economy at USD 3 trillion level
  • From USD 1.85 trillion dollars in 2014, the economy has reached USD 2.7 trillion; we can very well reach USD 5 trillion mark in the next few years
  • Connectivity: Government has given massive push to the information technology
  • Enabling ecosystem for maintenance, repair and overhaul industry (MRO) to achieve self reliance in aviation sector
  • New metro rail projects for a total length of 300 km approved in 2018-19, in 2019 about 210 km of metro has been operationalised. 657 km of metro network operational now
  • to provide blueprint for the development of gas, water & regional airports
  • Advanced battery and e-vehicles will be incentivized for public transportation of common man
  • Ensure national highway grid is created using financial model through Bharatmala. State road network to be built in Bharatmala in second phase “In phase two of Bharatmala project, specific focus on building state road network would further boost economic growth”
  • Comprehensive restructuring of National Highways Programme to be done, to ensure creation of National Highways Grid of desirable capacity
  • Railway infrastructure needs INR 50 lakh crore between 2018 and 2030. Capital outlays of INR 1.5-1.6 lakh crores per annum. This will be done through PPP to unleash faster development, improve rolling stock and passenger and freight services
  • Using rivers to improve cargo transport. In additional to Varanasi, multimodal terminals will be developed at Sahbganj and Farakka
  • One nation one grid for power sector. Ensure power affordability to states at affordable rates
  • Model tenancy law to be circulated to states
  • Large public infrastructure can be built on land parcels held by Central Ministries and Central Public Sector Enterprises across the country. Through innovative instruments such as joint development and concession, public infrastructure and affordable housing will be taken up
  • Access to low cost capital for an investment driven growth. India require investments averaging INR 20 Lakh crore every year (USD 300 billion a year). In this regard, an action plan to deepen the market for long term bonds including for deepening markets for corporate bond repos, credit default swaps etc., with specific focus on infrastructure sector, will be put in place. In addition, a credit guarantee enhancement corporation (as per RBI guidelines) will be set up in 2019-20
  • Asks SEBI to consider threshold revisions to ensure and harmonise hassle free investments for foreign portfolio investors
  • An electronic fund raising platform – a social stock exchange under SEBI for listing social enterprises and voluntary organisations working for realization of a social welfare objective so that they can raise the capital as equity, debts or as units like mutual funds
  • Government will further consolidate the gains from FDI inflow to India. Government will further examine and consider opening up FDI in aviation, media and insurance sectors. 100% FDI will be permitted for insurance intermediaries
  • Government is planning Annual Global Investors meet using national infrastructure investment fund (NIIF)
  • Attracting cross border investments through Foreign Portfolio Investors (FPIs) by increasing the statutory limit for FPIs in a company. NRI investments is comparatively less in India, so govt. proposes to merge NRI investment portfolio investment scheme route with the foreign portfolio investment route

Improved Ease of living and welfare of rural India

  • Ujjawala and Saubhagya has transformed ease of living. Gaon, gareeb and Kisan are centrepoint of government schemes
  • By 2022, assure the nation that every single rural family (except, those who are unwilling to take the connection) will have an electricity and clean cooking facility
  • Pradhan Mantri Awas Yojana – Gramin (PMAY-G) aims to achieve the objective of “housing for all” by 2022. In second phase, 1.95 crore houses are proposed to be provided to the eligible beneficiaries with amenities like toilets, LPG connection and electricity connection
  • Average number of days for completion of a houses has reduced from 314 days in 2015-16 t0 114 days in 2017-18. That’s how scale is possible
  • Pradhan Mantri Gram Sadak Yojana (PMGSY) has brought many socio economic gains in the rural areas. To accelerate the speed of achieving universal connectivity of eligible habitations, the target of connecting the eligible and feasible habitations was advanced from 2022 to 2019. 30,000 kms of PMGSY roads have been built using Green Technology, Waste Plastic and Cold Mix Technology, thereby reducing carbon footprint. all weather connectivity has now been provided to over 97% of such habitations. Rs 80,250 crore dedicated to building 125,00 km of roads in the next 5 years
  • Robust fisheries management framework
  • Swachh Bharat to make India Open Defecation Free (ODF) by the 150th birth anniversary of Mahatma Gandhi on October 02, 2019
  • 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) in 2019-20 to develop 75,000 skilled entrepreneurs in rural agriculture
  • Promoting Private entrepreneurship in driving value addition to farmers’ produce from the field and allied activities such as cultivation of agro energy crops (bamboo, timber, etc.) to even promote renewable energy. “Annadata can also be Urjadata.”
  • 10,000 new farmer produce organization to ensure economies of scale for farmers over the next five years
  • Need to replicate Zero Budget Farming in many states; going back to basics, which will help Doubling Farmers Income
  • Har ghar Jal by 2024 to all rural household under jal jeewan mission. Focus on integrated demand and supply side management of water at the local level. Using ground water recharge, rain water harvesting, and recycling of wastewater
  • We must sustain the behaviour change and harness the latest technology to promote waste to energy. Sustainable solid waste management to be taken in every village under the swachh bharat mission
  • Under PM digital Saksharta Abhiyaan, Bharat net is targeting internet connectivity in every panchayat in the country
  • All-weather road connectivity provided to more than 97% of eligible and feasible habitations, made possible by a high pace of road construction
  • 100 new clusters to be set up in 2019-20 under SFURTI, which will enable 50,000 artisans to join the economic value chain
  • Digital payments are getting great acceptance
  • 35 crore LED bulbs under UJALA yojana | 18343 crore savings | India is going to be free of incandescent bulbs soon
  • Ease of living: Massive programme on railway station mordenisation will be launched

 

Urban India: Making cities better, use of technology, and housing for all

  • Large scale adoption of using new technologies in construction of new houses. Under PMAY-U, over 81 lakh houses (4.83 lakh crore) have been sanctioned. Over 26 lakh houses have been completed, nearly 24 lakh houses has been delivered. New scale technology is used for construction of these houses
  • More than 95% of cities are already declared ODF. Location of toilets are uploaded on google maps covering more than 53% of India’s urban population
  • Railways to invest more in suburban railways through special purpose vehicle (SPV) and rapid regional Transport System (RRTS) by encouraging more PPP initiatives

 

Quality and level of Education, skill development for the youth of India

  • National education policy to transform into best education system. Greater focus on R&D. Propose National Research Foundation (NRF) will assimilate research grants from various ministries to ensure strengthening research on identified thrust areas without duplication of efforts. Funds from all ministries will be integrated with additional funds
  • Start a programme, “Study in India” to focus on bringing foreign students to come and study in India. Higher education commission of India (HECI) is proposed to be set up through legislative route
  • Promoting online open courses through the SWAYAM initiative
  • Industry relevant skill training through PM Kaushal Yojana. Trends show that major economies will face severe labour shortage. We will prepare our youth on new age skills to cater to the global and local demand. We will focus on new age technology like artificial intelligence, internet of things, etc

 

Ease of Doing Business and Make in India with a specific focus on Micro, small and medium enterprises

  • Streamline multiple labour laws into a set of four labour codes. This will ensure that process of registration and filing returns become streamlined with less disputes
  • A dedicated television program within the door darshan (DD) network exclusively for the startups, discussing issues that affects their growth and matchmaking with venture capitalists for tax planning and raising funds
  • Loans up to 1 crore rupee within 59 minutes for MSMEs, 350 crore has been allocated for all GST registered MSMEs on fresh or incremental loans
  • Government to create a payment platform for MSMEs for cutting down the time and delays. INR 350 crore allocated at 2% for 2019-20 for MSMEs
  • Standup India has delivered enormous benefits to women entrepreneurs and also from the scheduled Castes and scheduled Tribes

 

Women Empowerment, gender balance and promoting leadership for India’s socio-economic transformation

  • Women of India (Naari to Narayani): Gender analysis of the budget has been there for over a decade. Propose a committee to evaluate and suggest actions for moving forward to enhance contribution and participation of women. Leadership of women is necessary for India’s Socio-economic transformation. We have a record number of women MP this year. This reinforced our approach to bring women led initiative instead of just women centric schemes
  • To encourage women enterprises, propose Jan Dhan account for every women SHG with overdrafting facility. One woman in each SHG is eligible for loan of up to 1 lakh

 

India: Soft Power

  • International yoga has a huge impact on over 192 countries. Proposes Aadhar cards for NRIs with Indian passports on arrival in India without a waiting period
  • 17 new iconic tourism sites to be created with an objective of showcasing rich tribal heritage including skill sets, lifestyle and other details of tribes in India


Banking and Financial sector

  • PSBs are proposed to be further provided INR 17000 crore of capital to boost credit into economy
  • INR 100 lakh crore on infrastructure over next five years. A committee shall recommend the structure and flow of funds through development finance institutions
  • Indian Developmental Assistance Scheme to be revamped during current financial year
  • Comprehensive restructuring of National Highways Programme will be done to ensure the creation of National Highways Grid of desirable capacity. Government envisions using rivers for cargo transport, it will also decongest roads and railways
  • NBFCs that are fundamentally sound should continue to get funding from banks and mutual funds without being unduly risk averse
  • Strategic disinvestment of select CPSEs would continue to remain a priority of this Government

 

Tax reforms and attracting investments 

  • Phased reduction in corporate tax. Currently, the lower rate of 25 % is only applicable to companies having annual turnover up to 250 Crore. Budget 2019 propose to widen this to include all companies having annual turnover up to 400 crore
  • Government will launch a scheme to invite global companies through a transparent competitive bidding to set up mega-manufacturing plants in sunrise and advanced technology areas such as Semi-conductor Fabrication (FAB), Solar Photo Voltaic cells, Lithium storage batteries, Solar electric charging infrastructure, Computer Servers, Laptops, etc. and provide them investment linked income tax exemptions under section 35 AD of the Income Tax Act, and other indirect tax benefits
  • Simplifying GST returns. simplified single monthly return is being rolled out. Taxpayer having annual turnover of less than 5 crore shall file quarterly return. Free accounting software for return preparation has been made available to small businesses. A fully automated GST refund module shall be implemented. Multiple tax ledgers for a taxpayer shall be replaced by one
  • Enhance the surcharge of 3% on individuals having taxable income between INR 2-5 crore; and INR 5 crores and above, the applicable surcharge will be 7%

Promotion of clean energy

  • Investment linked income tax exemption and other indirect benefits to foreign companies investing in solar, EVs, batteries, etc
  • Lower the GST from 12% to 5% on electric vehicles. Additional income deduction of 1.5 lakh on the interest paid on loans taken to purchase EVs
  • Hike in excise duty and imposition of cess on petrol/diesel

The links to the Budget and the Expenditure are as follows:

Budget:  https://www.indiabudget.gov.in/
Expenditure: https://www.indiabudget.gov.in/exp_budget.php

Download the PDF for Key features of Budget 2019-20